RXi Pharmaceuticals (RXII) Is Strong On High Volume Today

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified RXi Pharmaceuticals ( RXII) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified RXi Pharmaceuticals as such a stock due to the following factors:

RXII has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $2.8 million.

RXII has traded 263,590 shares today.

RXII is trading at 20.45 times the normal volume for the stock at this time of day.

RXII is trading at a new high 8.33% above yesterday's close.

'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize. In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

RXi Pharmaceuticals Corporation, a biotechnology company, focuses on discovering, developing, and commercializing therapies based on its proprietary, next-generation RNA interference (RNAi) platform. Currently there is 1 analyst that rates RXi Pharmaceuticals a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for RXi Pharmaceuticals has been 241,000 shares per day over the past 30 days. RXi has a market cap of $53.6 million and is part of the health care sector and drugs industry. The stock has a beta of 1.37 and a short float of 5.1% with 0.70 days to cover. Shares are unchanged year-to-date as of the close of trading on Monday.

TheStreet Quant Ratings rates RXi Pharmaceuticals as a sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:

The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Biotechnology industry average. The net income has decreased by 2.3% when compared to the same quarter one year ago, dropping from -$1.96 million to -$2.01 million.

RXII has underperformed the S&P 500 Index, declining 6.51% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.

The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Biotechnology industry and the overall market, RXI PHARMACEUTICALS CORP's return on equity significantly trails that of both the industry average and the S&P 500.

RXII, with its very weak revenue results, has greatly underperformed against the industry average of 43.5%. Since the same quarter one year prior, revenues plummeted by 94.7%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.

Net operating cash flow has slightly increased to -$2.02 million or 1.89% when compared to the same quarter last year. Despite an increase in cash flow of 1.89%, RXI PHARMACEUTICALS CORP is still growing at a significantly lower rate than the industry average of 101.54%.